Litigant Resources and the Evolution of Legal Precedent

30 Pages Posted: 21 Sep 2009 Last revised: 16 Jan 2012

See all articles by Richard Startz

Richard Startz

UCSB

Albert Yoon

University of Toronto - Faculty of Law

Date Written: September 8, 2009

Abstract

This paper develops an informational model of litigation in which court decisions are a function of legal representation. In this model, resource constraints determine how much parties expend on legal representation. The allocation of resources across parties influences court decisions in two important ways. First, in individual cases the party with greater resources can produce more information, thereby increasing her probability of a favorable decision by the court. Second, as the cost of litigation increases relative to parties’ resources, courts have less information upon which to make decisions. We model the evolution of precedent as a dynamic externality under stare decisis. These factors determine the evolution of legal precedent. In areas of law in which parties on a particular side have persistently greater resources, the law is likely to evolve in a direction that favors that side. The extent of information provided determines the variability of outcomes.

Keywords: Litigation, Legal Precedent, Litigation Costs

JEL Classification: C15, C67, C73, K41, D31

Suggested Citation

Startz, Richard and Yoon, Albert, Litigant Resources and the Evolution of Legal Precedent (September 8, 2009). Available at SSRN: https://ssrn.com/abstract=1475350 or http://dx.doi.org/10.2139/ssrn.1475350

Richard Startz

UCSB ( email )

Department of Economics
University of California
Santa Barbara, CA 93106-9210
United States
805-893-2895 (Phone)

Albert Yoon (Contact Author)

University of Toronto - Faculty of Law ( email )

78 and 84 Queen's Park
Toronto, Ontario M5S 2C5
Canada

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